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a cliffhanger for homeowners. how tumbling over the fiscal cliff could affect the housing recovery. in today's cover story, coffee bean prices are dramaticly
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lower. why the price of some cups of joe remains the same. plus, a breakdown of the recent jobs data. what sector is still struggling? what you can expect to pay at the gas pump this holiday season. and, this year's literary sensation made for a very merry christmas for workers at a publishing house. first business starts now. you're watching first business: financial news, analysis, and today's investment ideas. good morning. it's monday, december 10th. i'm angela miles. in today's first look: traders are watching for a santa claus rally, but it's not happening for tech yet. on friday the dow finished off a 3-session winning streak, but the nasdaq lost more ground as apple continues to sink tech stocks. gold rallied above $1,700 an ounce, while oil pulled back. aig reports its losses from damage and destruction caused by superstorm sandy will be $1.3 billion.
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it's green monday. the second monday in december is considered a critical day for retailers as holiday shoppers begin to realize time is quickly counting down to christmas. phillip streible of rjo futures is here to get us going on a monday morning. happy monday to you. > > and also to you. > it is going to be a busy week. we have a fed meeting coming up this week, and a lot of people are talking about this so-called "gold storm." what does that mean? > > what people are doing is they are looking at this fed announcement that is coming up and seeing if the fed will make any kind of adjustment to the current policy that they have in place. there is some talk that they may adjust some of the duration of the treasuries that they are looking at purchasing, so the gold market may continue an upward rise right through $1,735. really i think the next key psychological level is $1,800. > what do you anticipate from
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the stock market? will we see any kind of follow-through on the jobs number this week? > > really we saw a very strong move just after the jobs number, but we saw a breakdown when the fiscal cliff talks started to develop. so continue to watch any of those talks with boehner and obama, and if they make any kind of progress. then we can see the s&p start to build momentum on that and travel upward. > people who were investing overseas are very happy about what is happening in europe. german stocks are soaring. is it too late to get in? > > we saw the dax push up to a 52-week high last week. really the key here is safety. they are using that stock market as their safety gauge if they are trading over in europe. so, if the safety play continues to warrant being ultra- conservative, yeah, you are going to see that market continue to move upward. if traders want to take on a little bit more risk and spread to some of the other european sovereign-debt nations like spain or greece, then you are probably going to see that safety play back off a little bit.
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> there are always places to park money. good to have you on the show this morning. have a great trading day. > > you too. if you're not yet fully awake this monday, here's one thing to open your eyes: after years of higher and higher coffee prices to consumers, brazil, which produces a third of the world's coffee, may turn prices around. a record crop there last year is being followed by another bumper crop. our cover story takes a look at what it means for coffee futures and retailers. brazil is expecting a record coffee crop again, just one year after its biggest harvest ever. "that would be a fabulous production." jack scoville, a commodities broker in chicago, says the bumper crop is the direct result of more coffee farms planted in brazil when a series of small crops drove prices high a couple of years ago. "it's because new trees and new areas are coming on." falling futures aren't great for investors, but may have coffee consumers buzzing. "if it's premium coffee, i'll buy a pound of it." "the average cup of coffee will be cheaper in the grocery.
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whether independent coffee shops drop their prices from $5.00 to $4.50 for a latte, i can't predict that." "the folgers, hills brothers will get extremely competitive. if there's an advantage to being cheaper, they certainly will take it." but at starbucks, the world's largest coffee chain, a spokesman said there's been no company statement released about the brazilian crop and added: "coffee commodity prices are only one component in the equation." the chain is expanding. it plans to open 2400 starbucks in china and the u.s. within two years. "overall, there's going to be coffee available. that'll help you on pricing, so it might be a good time to be expanding." starbucks' expansion plans aren't only meared number of shops. in the last 12 months, its acquired juice
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company evolution fresh, bakery la boulange, and is about to finalize acquisition of tea company teavanna. tensions remain high in michigan's capitol city, where legislation is about to be passed that could weaken the power of unions. protestors are furious. republican lawmakers moved quickly last week to enact "right to work legislation," allowing workers at unionized companies not to pay dues to the union, which reduces bargaining power right in the uaw's own back yard. the measure has already been approved by both chambers of michigan's legislature, and final enactment could take place tomorrow. republican governor rick snyder supports the legislation. if enacted, it would make michigan the 24th state with right-to-work laws. recent strikes at a california
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shipping port are over, but concerns of outsourcing persist. last week, striking workers protested that their jobs were being outsourced. employers denied sending jobs abroad. however, there is evidence that some industries are ramping up outsourcing. consulting firm the hackett group estimates since 2002, 663,000 jobs from large u.s. companies have gone abroad, mainly from industries like information technology, human resources, finance and purchasing. by 2016, the firm says another 375,000 jobs will have gone to places such as india, china, mexico and the philippines. just one day after apple reveals it will manufacture some of its products in the u.s., foxconn says it may follow suit. foxconn, apple's primary manufacturer in china, says it is considering expanding its operations in the u.s., where it currently has two factories. foxconn has seen its image suffer of late following revelations that workers are subjected to poor working
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conditions and mandatory overtime at factories in china. the company says expanding its american operations is part of a long-term global expnasion plan. american airlines is closer to flying out of bankruptcy now that the pilots' contract is a done deal. pilots have flown without a contract since 2006. under terms of the agreement, they will receive a pay raise, plus a 13.5% stake in the company worth around $100,000. in exchange, the airline can outsource more flights to partners and regional jets. the contract was approved by 74% of pilots. concerns about how the fiscal cliffhanger in congress will be resolved are sparking up short sales in the real estate market. if tax breaks expire at the end of the year, that could include the mortgage forgiveness debt relief act, which has been around since 2007. under the act, homeowners and banks get a tax break when buying property for less than the amount owed. for people considering short sells, real estate brokers say to act now. "-because of the fact that you are under contract today, and you have to be under contract
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before december 31st. that's when the contract is set to expire. though we don't think it will, just to be on the safe side, get it done before december 31st." that was maybel guzman of the illinois assocation of realtors. one mortgage data service reports that short sales increased by 35% in the third quarter. lloyd blankfein has made a pretty hefty real estate investment in the hamptons. according to reports, the ceo of goldman sachs has purchased a sprawling home in the upscale bridgehampton neighborhood in new york. the 8,000-square-foot home boasts a tennis court, gardens, and a wet bar. the new york post reports the house was listed for a whopping $32.5 million. ahead of today's sales numbers from mcdonald's, there's at least one burger believer. the golden arches dissapointed wall street last month by reporting a 2.2% decline in same-store sales for october - the first decline in 9 years. now, an analyst with janney capital markets believes november's same-store sales should increase by 1.7%. back in september, the firm downgraded the burger chain to "neutral," but is now upgrading the stock
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back to a "buy," with a $104 price target. some turbulence for boeing. first, the federal aviation administration issued a formal rule late last week requiring all u.s. carriers to inspect fuel systems on boeing's new 787 dreamliner. now comes word that two different boeing customers have cancelled six plane orders, representing a nearly $1.9 billion loss for the company. groupon stock popped following rumors that google might be planning a takeover. groupon shares hit $4.69, the highest level in 3 weeks, after rumors spread that google could be considering a buy of the coupon company. groupon rejected a $6- billion bid from google prior to going public. but bloomberg news reports since groupon's market share has fallen in value, google is considering another offer. both google and groupon have declined comment. google is turning into a shopper's friend this christmas. 80% of people are googling their research on
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christmas purchases before buying. however, julia krueger of google says this doesn't necessarily mean shopping habits are transitioning to online- only. "they want to feel confident about what they're buying, and feel like they are getting a good value. so not everybody looks for the lowest price, but very often they want to feel good about the price they are paying. so even if it's within a few dollars, it may be a better purchase for someone to buy it locally or to be able to know that they can get it today if they decide to buy at a physical store." kreuger says some of the most searched gifts for kids this holiday season are leap pad tablets, build-a-bear, and g.i. joe. for adults, searches are up for tablets, laptops and engagement rings. fedex workers serving as santa's little helpers this year will have tough sledding this week. the delivery company expects today will be a record- breaker, with 19 million
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packages being shipped and delivered. 300,000 employees, plus 20,000 seasonal workers, are on standby to make sure gifts make it by christmas. having a bestseller benefitted all the employees at random house publishing this year. according to abc news, due to the wildly successful novel "50 shades of grey," publisher random house is giving all of its employees an over $5000 bonus this holiday season. still to come, gas prices are tanking. a check on what's happening with prices at the pump during the holidays, later on. but first - is the latest round of unemployment data necessarily good news for the economy? bill moller explains - next, after this "in the know" message.
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it's called the labor report - the monthly numbers from the labor department. they are released on the first friday on the month. it's not just a number, but a collection of sometimes contradictory data. the numbers for november are now out. everybody is now chewing over them. let's talk with brent schutte. he is the market strategist for bmo global asset management. the two main numbers, jobs created and the unemployment rate, would certainly seem to be good news. but what is the interpretation as to the overall picture? > > sure. i think this report was about as expected. when you strip away what actually happened, there was a lot of belief that sandy would bring down the number by about 80,000- > the storm, the hurricane. > > superstorm. superstorm sandy. would bring it down by
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about 80,000. on the other side of the equation, you actually had an early thanksgiving, which could have added some jobs as employers pulled forward their normal seasonal hiring. so the 146, or 147, is about the same as- > 147,000 jobs created. > > right. is about the same as what has been created over the last two years. in 2011 the number was about 150,000 on average. in 2012, 150,000 on average. > it's also based on - at least the unemployment rate of 7.7% - it went down a little bit - based on the fact that there were fewer people looking for work, not more people finding work. > > sure. at the end of the day, i think there are really two things, and i harp on these each and every time i come on the show, that are kind of driving unemployment in this country. one, i think there's a structural problem. i don't think the fed is going to be able to have people create more jobs, because there is a problem with a mismatch of skills. there are two articles in friday's wall street journal that kind of point to this. one talks about fort wayne, indiana, and how they are having trouble
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finding people to fill open manufacturing jobs. > these are modestly-skilled jobs? > > right. i think the problem with manufacturing is that we have kind of moved upstream. they are having to get people to fill a little bit more skilled jobs than what we had in the past. on the other side of the coin, and why i'm more positive longer-term, is you actually have some positive things happening in this country with the natural gas that we have now, manufacturing is now coming back. apple, in a different wall street journal article on the same page, reported they are bringing some jobs back to this country. > your point though is that, didn't manufacturing drop in these latest numbers? > > it did. and the reason probably is because of europe. i think a lot of the export markets, europe has been still in a little bit of a malaise, and asia is just starting to emerge from one. so we will actually probably start seeing manufacturing pick up in the not-too-distant future.
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> all right, so a long-term prognosis, positive for you; short-term still kind of wobbly? > > i think next year you're going to have an issue with a push and pull from the fiscal cliff. on the one hand, business owners will actually have some certainty what tax rates are going to be, and that's a positive. that may unleash some hiring. and on the other hand, you are going to have tax increases. and that is actually not good for shorter-term growth. > brent schutte from bmo harris. thanks so much. > > thank you. still ahead, christmas may have come early for drivers. gasoline prices are headed lower. more on that next.
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prices at the pump continue to slide. gas prices are down 3 cents on average nationwide to
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$3.37. the ever-energetic phil flynn of price futures group and a fox business news contributor joins us this morning. good morning phil. > > good morning! am i bringing good news to america. merry christmas! > we love this for a monday phil. so what is going on with gas supplies? > > it is called reefer madness-no! it's refiner madness! > there you go. > > last week, refiners rose to the occasion. in the aftermath of hurricane sandy, of course, the markets were screaming, "we need more gasoline! supplies are below normal! the east coast needs gasoline." so refining merchants went through the roof. what did the refiners do? they were refining gasoline not like we were going into thanksgiving and christmas. they work refining like we were going into the fourth of july. we saw refining margins go above 90% capacity, and produce so much
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gasoline that we saw the biggest one-week inventory build in gasoline supplies that we have seen in over 15 years, since september of 2001. i will take it a step further. what else we saw in that inventory report is, over the last two weeks, we have built almost 12 million barrels of gasoline in just two weeks. that is almost unheard of. the refiners did a phenomenal job, and that means not only are gasoline prices low today, they are probably going to continue to get lower into the end of the year. > that is what i'm wondering. how low phil? > > oh man. i am telling you, $3 gasoline, not too far away. i think we're going to do it. and of course, we would have been there earlier if it weren't for the hurricane, and if it weren't for the bad weather. but many parts of the country, you will see gasoline get below $3 a gallon. now i don't want to get everybody excited, because we are talking about a national average here. there are going to be some places, like the big cities, where you are going to be paying a little bit more like you always do. but, it's a very nice christmas present,
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the lowest gasoline prices we have seen in some time. and they are going to continue to go down. > perhaps consumers can spend a little bit more on christmas gifts. this could be a good thing for the economy. > > you did get my list then. i am very happy about that. > your gift just became so much more expensive phil. > > thank you. > good to have you on the show this morning. happy holidays. > > thank you. you too. up next, cisco systems is prime to buy another company. what that means for the stock.
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andrew keene, president of, joins us now for a closer look at cisco systems. good morning, and what do you think about this stock? > > it is interesting. it's trading at $19.35, which is above the major moving averages
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- the 100-, 150-, the 200-day is right around this $18.50- $18.80 level. so that is positive. however, it has gotten up to $19.75 and found sellers at that level, so it is kind of trading right in the middle. tom chambers came out and said he would be interested in buying more companies. we looked at hpq, which is one of their competitors, bought autonomy, and that was an absolute disaster. so, do they want to dilute their p/e? they are currently trading at about a 12 p/e. if they go into the cloud space, that might help them in the future. however, right now that is going to make their p/e rise a lot, because they are going to be buying a company with a forward p/e of 40 or 50. so it's very interesting. i am going to keep a close eye on this one. > the stock is up what? about 8% this year? how high can it go? > > the qqqs are up about 20% this year, so it is underperforming the qs. if it breaks through $19.75, and we get a break through $20, we get a deal on the fiscal cliff - $21.60 is the 52-week high - if a fiscal cliff deal gets done, it breaks through $20, i think it has an upside measure/move target of $21.60. so i am going to be looking to be a buyer
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above $20. > good to have you on the show. that is andrew keene, president of > > thank you. we are running out of time for today. coming up tomorrow: the behind-the-scenes story on why the plug was pulled on circuit city. from all of us at first business, have a great monday!
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. a homicide investigation in san francisco, the unusual way the victim was found and why police need your help. we have more on the missing man police are looking for this morning. it could affect your drive, it's all ahead on the ktvu channel 2 morning news. this is ktvu channel 2 morning news. >> good morning, thank you for joining us this monday morning, i am pam cook. >> let's see how long this will last, steve. >> two days. >> it's cold at night. >> it is going to

First Business
FOX December 10, 2012 4:00am-4:30am PST

News/Business. Angie Miles. (2012) New. (CC) (Stereo)

TOPIC FREQUENCY Google 7, U.s. 5, Us 4, Europe 4, China 4, Brazil 3, Michigan 3, Groupon 2, New York 2, Andrew Keene 2, Sandy 2, Boeing 2, Ktvu 2, Apple 2, Bmo 2, Cisco 2, Brent Schutte 2, California 1, Julia Krueger 1, Moller 1
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